Various news sources confirm that Nokia will stop selling its phones in Japan -

http://news.cnet.com/8301-1035_3-10109528-94.html  http://www.pcworld.com/article/154619/.html?tk=rss_news

I can't say that I'm very surprised.

When a consumer buys a phone from a non-Japanese maker, he discovers that ...

(1) He can't use most of the iMode or EZweb sites that most Japanese people are using to communicate, interact, find information etc.

(2) His phone service costs an arm and a leg if he uses the browser to view ordinary "PC-Web" style web sites. (My bill from Softbank was over 11,000 yen last month  -- and it's not even my primary phone. It transpires that I had to pay 2,700 yen for SMS messages that I received during the time I spent in Europe. What were those messages? Mostly "Welcome to XYZ" messages from the local carriers in the countries I visited).

(3) He has to learn an unfamiliar set of commands and ways of navigating to online services

(4) His phone doesn't have the built in features that matter - for example, no mobile wallet. (At least not one that he can use on the trains and in the stores in Japan).

... It's funny to see Japan described as the  "Galapagos" of the mobile world. But I think it might be appropriate. We're finally seeing mobile services become popular outside of Japan, but they're evolving in a very different direction.

NOV 28/ 2008 - EDIT - "NOKIA phones in Japan - Vertually Finnished"

A reader pointed out to me that Nokia plans to sell it's luxury Vertu phone in Japan, as an MVNO with docomo. So, it's not completely exiting the Japanese market.

However, I think that Vertu will struggle to find any customers among Japanese people. Even wealthy Japanese people who can afford the handset won't be satisfied unless it matches the functionality of existing phones in the market (and then exceeds the value of locally produced phones by adding in well-executed, globally available, premium services that justify a high price tag). Gen Kanai sums it up perfectly -

Unless Vertu has a whole new line of phones designed just for the Japanese market, they'll fail via product, as Vodafone did. And even if Vertu has a whole new line of phones for Japan, it's incredibly poor timing to launch a premium-anything in Japan.